Homeowners insurance agencies are embedding their policy-underwriting technology into mortgage companies' origination and servicing systems in a bid to chase the same customers together.
For the insurance agencies, the partnerships open up a low-cost sales channel directly to homebuyers in their moment of need. For mortgage companies, the integrations help pull more of the homebuying process into the digital fold at a time when lenders are keenly focused on improving efficiency.
"It's impossible to have a digital mortgage and e-close…without having automated and digital home insurance," explained Benjamin Madick, co-founder of Matic Insured Services, an insurance agency based in suburban Los Angeles. "It's the only product a consumer has to purchase on their own, and it's the only one that's done outside of the mortgage ecosystem."
Lenders typically expect a three-to-seven day wait for borrowers to get a homeowners insurance policy in place. By reaching borrowers directly during the mortgage process, homeowners agencies can utilize data collected from the mortgage application to quickly customize a homeowners insurance policy.
The improved processes and experience is like the upgrade from a basic cell phone to a smartphone, said Derek Batt, a vice president at QuickInsured, an insurance agency in Columbus, Ohio.
"The long, methodical process that we call manual, or traditional, is kind of that flip phone, where today the iPhone, which is the next best thing [that] makes your life so much more efficient, is what our integration is and it's allowing us to have success," he explained.
Matic and QuickInsured have somewhat different approaches to their integrations with mortgage companies. But the companies both utilize loan data, machine learning and human-powered intelligence in their efforts.
"Our goal is to automate the home insurance buying process for borrowers. And by integrating with the lenders, we take a 90- to 100-question application down to five or six," said Madick.
Through a series of clicks on a desktop or mobile device, the borrower initiates a process where the insurance agency collects information and data, as well as consent from the borrower to share that information to generate real-time quotes from multiple carriers that the consumer can compare.
QuickInsured offers insurance policies from Nationwide through an integration with Ellie Mae's Encompass loan origination system. Joe Tyrrell, executive vice president of corporate strategy at Ellie Mae, noted that partner participants have expressed positive results in regards to time efficiency. He expects results to amplify once proof of insurance is generated through Encompass.
"[The integration] is not just about saving time on getting the initial quote and actually securing the insurance," explained Tyrrell, "but facilitating the delivery of that proof right into our lenders system so that they can check off that part of the requirement and continue to move the solution forward."
Another of QuickInsured's top priorities is data integrity.
Controls exist to ensure that only a limited amount of information is shared; QuickInsured never retrieves consumer personal information such as credit card or Social Security numbers.
Matic has direct integrations to its carriers, and does receive borrower personal information. All information is encrypted and shared through a secure network. Having direct integrations also allows Matic to continuously provide borrowers with optimal coverage after the loan closes.
"One of the values that Matic brings is that after the borrower gets a loan…every year before their policy expires we re-shop for them to make sure that they have the best product," said Madick.
Matic saves borrowers an average of $418 annually, the company said.
Among the lenders partnering with Matic is Academy Mortgage Corp. in Draper, Utah.
"Most of the loan officers want to get out of the data and document collection business and more into the relationship business," said Dan Richards, executive vice president and chief information officer of Academy Mortgage. "What Matic has put together, which we love, is the ability to get that instant quote… and from what we've seen the quotes are always competitive."
Companies choosing to work with Matic or QuickInsured share a common vision in taking strides toward a more modern, efficient mortgage process.
"We looked for partners that had similar visions on the insurance side. Being a next-gen platform ourselves, we needed a next-gen insurance agency, and Matic really fit the bill perfectly," said John Paasonen, CEO at Maxwell, a digital mortgage platform in Denver.
Involved parties seemed to agree that the future of their industries is digital.
"I just think that technology in this space is so key and so crucial, and it'll continue to go that way for as long as we're originating loans," said Batt.